Price

The wholesale price of your product must be set each quarter in each of the market areas in which your firm is operating.  During the last quarter of Year 2, each firm charged $10.00 per unit for its product in each of the three Merican market areas and Ps 75 in Sereno.  For price, as for all other decision variables, last period's value will be used if there is no entry for the current quarter. Company policy (and the simulation model) limits price changes to a maximum of 30 percent per quarter in domestic markets and 40 percent in foreign markets.   Because the product price was $10.00 in domestic areas during Year 2, Quarter 4, the highest price that your company may charge in these areas in Year 3, Quarter 1 is $13.00 and the lowest is $7.00.  A price change as large as this is discouraged because of the unknown effect that such changes may have on the market.  Management may specify different prices for different areas.  If your price is in whole dollars, enter zeros for the cents so that there is no question of whether you forgot to enter the cents figures.

The Sereno market area price is set in pesos rather than dollars.  Decimal fractions for pesos are not required.  See the current exchange rate (found in each quarter's financial reports) to translate pesos to dollars and cents.

Maximum change, Areas 1 to 3:  30 percent in any quarter.

Maximum change, Sereno:  40 percent in any quarter.

Exception:  If the sales office is closed the price is 0